diff --git a/packages/cli/src/ui/hooks/useKeypress.test.ts b/packages/cli/src/ui/hooks/useKeypress.test.ts
new file mode 100644
index 00000000..a30eabf2
--- /dev/null
+++ b/packages/cli/src/ui/hooks/useKeypress.test.ts
@@ -0,0 +1,261 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { renderHook, act } from '@testing-library/react';
+import { useKeypress, Key } from './useKeypress.js';
+import { useStdin } from 'ink';
+import { EventEmitter } from 'events';
+import { PassThrough } from 'stream';
+
+// Mock the 'ink' module to control stdin
+vi.mock('ink', async (importOriginal) => {
+  const original = await importOriginal<typeof import('ink')>();
+  return {
+    ...original,
+    useStdin: vi.fn(),
+  };
+});
+
+// Mock the 'readline' module
+vi.mock('readline', () => {
+  const mockedReadline = {
+    createInterface: vi.fn().mockReturnValue({ close: vi.fn() }),
+    // The paste workaround involves replacing stdin with a PassThrough stream.
+    // This mock ensures that when emitKeypressEvents is called on that
+    // stream, we simulate the 'keypress' events that the hook expects.
+    emitKeypressEvents: vi.fn((stream: EventEmitter) => {
+      if (stream instanceof PassThrough) {
+        stream.on('data', (data) => {
+          const str = data.toString();
+          for (const char of str) {
+            stream.emit('keypress', null, {
+              name: char,
+              sequence: char,
+              ctrl: false,
+              meta: false,
+              shift: false,
+            });
+          }
+        });
+      }
+    }),
+  };
+  return {
+    ...mockedReadline,
+    default: mockedReadline,
+  };
+});
+
+class MockStdin extends EventEmitter {
+  isTTY = true;
+  setRawMode = vi.fn();
+  on = this.addListener;
+  removeListener = this.removeListener;
+  write = vi.fn();
+  resume = vi.fn();
+
+  private isLegacy = false;
+
+  setLegacy(isLegacy: boolean) {
+    this.isLegacy = isLegacy;
+  }
+
+  // Helper to simulate a full paste event.
+  paste(text: string) {
+    if (this.isLegacy) {
+      const PASTE_START = '\x1B[200~';
+      const PASTE_END = '\x1B[201~';
+      this.emit('data', Buffer.from(`${PASTE_START}${text}${PASTE_END}`));
+    } else {
+      this.emit('keypress', null, { name: 'paste-start' });
+      this.emit('keypress', null, { sequence: text });
+      this.emit('keypress', null, { name: 'paste-end' });
+    }
+  }
+
+  // Helper to simulate the start of a paste, without the end.
+  startPaste(text: string) {
+    if (this.isLegacy) {
+      this.emit('data', Buffer.from('\x1B[200~' + text));
+    } else {
+      this.emit('keypress', null, { name: 'paste-start' });
+      this.emit('keypress', null, { sequence: text });
+    }
+  }
+
+  // Helper to simulate a single keypress event.
+  pressKey(key: Partial<Key>) {
+    if (this.isLegacy) {
+      this.emit('data', Buffer.from(key.sequence ?? ''));
+    } else {
+      this.emit('keypress', null, key);
+    }
+  }
+}
+
+describe('useKeypress', () => {
+  let stdin: MockStdin;
+  const mockSetRawMode = vi.fn();
+  const onKeypress = vi.fn();
+  let originalNodeVersion: string;
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+    stdin = new MockStdin();
+    (useStdin as vi.Mock).mockReturnValue({
+      stdin,
+      setRawMode: mockSetRawMode,
+    });
+
+    originalNodeVersion = process.versions.node;
+    delete process.env['PASTE_WORKAROUND'];
+  });
+
+  afterEach(() => {
+    Object.defineProperty(process.versions, 'node', {
+      value: originalNodeVersion,
+      configurable: true,
+    });
+  });
+
+  const setNodeVersion = (version: string) => {
+    Object.defineProperty(process.versions, 'node', {
+      value: version,
+      configurable: true,
+    });
+  };
+
+  it('should not listen if isActive is false', () => {
+    renderHook(() => useKeypress(onKeypress, { isActive: false }));
+    act(() => stdin.pressKey({ name: 'a' }));
+    expect(onKeypress).not.toHaveBeenCalled();
+  });
+
+  it('should listen for keypress when active', () => {
+    renderHook(() => useKeypress(onKeypress, { isActive: true }));
+    const key = { name: 'a', sequence: 'a' };
+    act(() => stdin.pressKey(key));
+    expect(onKeypress).toHaveBeenCalledWith(expect.objectContaining(key));
+  });
+
+  it('should set and release raw mode', () => {
+    const { unmount } = renderHook(() =>
+      useKeypress(onKeypress, { isActive: true }),
+    );
+    expect(mockSetRawMode).toHaveBeenCalledWith(true);
+    unmount();
+    expect(mockSetRawMode).toHaveBeenCalledWith(false);
+  });
+
+  it('should stop listening after being unmounted', () => {
+    const { unmount } = renderHook(() =>
+      useKeypress(onKeypress, { isActive: true }),
+    );
+    unmount();
+    act(() => stdin.pressKey({ name: 'a' }));
+    expect(onKeypress).not.toHaveBeenCalled();
+  });
+
+  it('should correctly identify alt+enter (meta key)', () => {
+    renderHook(() => useKeypress(onKeypress, { isActive: true }));
+    const key = { name: 'return', sequence: '\x1B\r' };
+    act(() => stdin.pressKey(key));
+    expect(onKeypress).toHaveBeenCalledWith(
+      expect.objectContaining({ ...key, meta: true, paste: false }),
+    );
+  });
+
+  describe.each([
+    {
+      description: 'Modern Node (>= v20)',
+      setup: () => setNodeVersion('20.0.0'),
+      isLegacy: false,
+    },
+    {
+      description: 'Legacy Node (< v20)',
+      setup: () => setNodeVersion('18.0.0'),
+      isLegacy: true,
+    },
+    {
+      description: 'Workaround Env Var',
+      setup: () => {
+        setNodeVersion('20.0.0');
+        process.env['PASTE_WORKAROUND'] = 'true';
+      },
+      isLegacy: true,
+    },
+  ])('Paste Handling in $description', ({ setup, isLegacy }) => {
+    beforeEach(() => {
+      setup();
+      stdin.setLegacy(isLegacy);
+    });
+
+    it('should process a paste as a single event', () => {
+      renderHook(() => useKeypress(onKeypress, { isActive: true }));
+      const pasteText = 'hello world';
+      act(() => stdin.paste(pasteText));
+
+      expect(onKeypress).toHaveBeenCalledTimes(1);
+      expect(onKeypress).toHaveBeenCalledWith({
+        name: '',
+        ctrl: false,
+        meta: false,
+        shift: false,
+        paste: true,
+        sequence: pasteText,
+      });
+    });
+
+    it('should handle keypress interspersed with pastes', () => {
+      renderHook(() => useKeypress(onKeypress, { isActive: true }));
+
+      const keyA = { name: 'a', sequence: 'a' };
+      act(() => stdin.pressKey(keyA));
+      expect(onKeypress).toHaveBeenCalledWith(
+        expect.objectContaining({ ...keyA, paste: false }),
+      );
+
+      const pasteText = 'pasted';
+      act(() => stdin.paste(pasteText));
+      expect(onKeypress).toHaveBeenCalledWith(
+        expect.objectContaining({ paste: true, sequence: pasteText }),
+      );
+
+      const keyB = { name: 'b', sequence: 'b' };
+      act(() => stdin.pressKey(keyB));
+      expect(onKeypress).toHaveBeenCalledWith(
+        expect.objectContaining({ ...keyB, paste: false }),
+      );
+
+      expect(onKeypress).toHaveBeenCalledTimes(3);
+    });
+
+    it('should emit partial paste content if unmounted mid-paste', () => {
+      const { unmount } = renderHook(() =>
+        useKeypress(onKeypress, { isActive: true }),
+      );
+      const pasteText = 'incomplete paste';
+
+      act(() => stdin.startPaste(pasteText));
+
+      // No event should be fired yet.
+      expect(onKeypress).not.toHaveBeenCalled();
+
+      // Unmounting should trigger the flush.
+      unmount();
+
+      expect(onKeypress).toHaveBeenCalledTimes(1);
+      expect(onKeypress).toHaveBeenCalledWith({
+        name: '',
+        ctrl: false,
+        meta: false,
+        shift: false,
+        paste: true,
+        sequence: pasteText,
+      });
+    });
+  });
+});
diff --git a/packages/cli/src/ui/hooks/useKeypress.ts b/packages/cli/src/ui/hooks/useKeypress.ts
index a8adba8d..d3e3df5c 100644
--- a/packages/cli/src/ui/hooks/useKeypress.ts
+++ b/packages/cli/src/ui/hooks/useKeypress.ts
@@ -7,6 +7,7 @@
 import { useEffect, useRef } from 'react';
 import { useStdin } from 'ink';
 import readline from 'readline';
+import { PassThrough } from 'stream';
 
 export interface Key {
   name: string;
@@ -48,7 +49,19 @@ export function useKeypress(
 
     setRawMode(true);
 
-    const rl = readline.createInterface({ input: stdin });
+    const keypressStream = new PassThrough();
+    let usePassthrough = false;
+    const nodeMajorVersion = parseInt(process.versions.node.split('.')[0], 10);
+    if (
+      nodeMajorVersion < 20 ||
+      process.env['PASTE_WORKAROUND'] === '1' ||
+      process.env['PASTE_WORKAROUND'] === 'true'
+    ) {
+      // Prior to node 20, node's built-in readline does not support bracketed
+      // paste mode. We hack by detecting it with our own handler.
+      usePassthrough = true;
+    }
+
     let isPaste = false;
     let pasteBuffer = Buffer.alloc(0);
 
@@ -79,11 +92,78 @@ export function useKeypress(
       }
     };
 
-    readline.emitKeypressEvents(stdin, rl);
-    stdin.on('keypress', handleKeypress);
+    const handleRawKeypress = (data: Buffer) => {
+      const PASTE_MODE_PREFIX = Buffer.from('\x1B[200~');
+      const PASTE_MODE_SUFFIX = Buffer.from('\x1B[201~');
+
+      let pos = 0;
+      while (pos < data.length) {
+        const prefixPos = data.indexOf(PASTE_MODE_PREFIX, pos);
+        const suffixPos = data.indexOf(PASTE_MODE_SUFFIX, pos);
+
+        // Determine which marker comes first, if any.
+        const isPrefixNext =
+          prefixPos !== -1 && (suffixPos === -1 || prefixPos < suffixPos);
+        const isSuffixNext =
+          suffixPos !== -1 && (prefixPos === -1 || suffixPos < prefixPos);
+
+        let nextMarkerPos = -1;
+        let markerLength = 0;
+
+        if (isPrefixNext) {
+          nextMarkerPos = prefixPos;
+        } else if (isSuffixNext) {
+          nextMarkerPos = suffixPos;
+        }
+        markerLength = PASTE_MODE_SUFFIX.length;
+
+        if (nextMarkerPos === -1) {
+          keypressStream.write(data.slice(pos));
+          return;
+        }
+
+        const nextData = data.slice(pos, nextMarkerPos);
+        if (nextData.length > 0) {
+          keypressStream.write(nextData);
+        }
+        const createPasteKeyEvent = (
+          name: 'paste-start' | 'paste-end',
+        ): Key => ({
+          name,
+          ctrl: false,
+          meta: false,
+          shift: false,
+          paste: false,
+          sequence: '',
+        });
+        if (isPrefixNext) {
+          handleKeypress(undefined, createPasteKeyEvent('paste-start'));
+        } else if (isSuffixNext) {
+          handleKeypress(undefined, createPasteKeyEvent('paste-end'));
+        }
+        pos = nextMarkerPos + markerLength;
+      }
+    };
+
+    let rl: readline.Interface;
+    if (usePassthrough) {
+      rl = readline.createInterface({ input: keypressStream });
+      readline.emitKeypressEvents(keypressStream, rl);
+      keypressStream.on('keypress', handleKeypress);
+      stdin.on('data', handleRawKeypress);
+    } else {
+      rl = readline.createInterface({ input: stdin });
+      readline.emitKeypressEvents(stdin, rl);
+      stdin.on('keypress', handleKeypress);
+    }
 
     return () => {
-      stdin.removeListener('keypress', handleKeypress);
+      if (usePassthrough) {
+        keypressStream.removeListener('keypress', handleKeypress);
+        stdin.removeListener('data', handleRawKeypress);
+      } else {
+        stdin.removeListener('keypress', handleKeypress);
+      }
       rl.close();
       setRawMode(false);